Cash Flow Statement · Class 12 · CBSE · Commerce Accountancy
Which of the following transactions is classified as an Operating Activity for a manufacturing company?
Practice question from Cash Flow Statement (Class 12 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
easy · MCQ · Q-1DC099
Which of the following transactions is classified as an Operating Activity for a manufacturing company?
- A.Issue of equity shares for cash
- B.Payment of wages to factory workersCorrect answer
- C.Purchase of machinery for cash
- D.Repayment of a long-term bank loan
Solution
Payment of wages is a routine operating expense directly related to the primary revenue-generating activity of a manufacturing company. Issue of shares and loan repayment are financing activities, while purchase of machinery is an investing activity.
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